Ispleasedtopresent

BestPracticesfortheFamily-RunDealership

WithValerieZiebronPresidentofVRZConsultingwww.vrzconsulting.com313-506-8069

ValerieR.Ziebron ValerieZiebron’sbackgroundissteepedintheserviceandpartsindustry.Startingintheautomotiveindustry,Ziebronexpandedtotechnology,retail,realestate,motorsports,andmarine.Ziebron’sclientshaveincluded:Chrysler,GeneralMotors,ShelbyAmerican,Yamaha,EastmanKodak,IPIX,Ruritan,AmTech,Regulator,Pursuit,andmanyothers.Shehasdeliveredmorethan10,000presentationsdomesticallyandinternationallyandhasworkedwithover3,000dealershipsbigandsmall,specializinginfamilyrunorganizations.Ziebronbelievesincreatingacomfortableandengaginglearningenvironmentthatfocusesonrealworldsolutions.Valeriehasbeenpresentingforovertwodecadeswithhermantraof:Educate,Motivate,andEntertain.SpecialThankstothemanydealershippersonnelwhohaveparticipatedinmyworkshopsthroughtheyears.Youhaveprovidedinsight,relevanceandcountlessbestpractices.Yourthoughtsandideasenergizeourprogramsandcontinuetoraisethebarinprofitable,proactiveserviceexcellence.

BestPracticesfortheFamily-RunDealershipIfyouwerelookingforemployment,wouldafamilyrunbusinessbeaplusoraminus?Why?____________________________________________________________________________________________________________________________________________________________FiveFoundationalGuidelinesforFamily-RunDealerships:#1)___________payment____________________________________________________________________________________________________________________________________________________________“Ifwehiredanon-familymembertodothisjob,whatwoulditpay?”Moneydoesnotequallove.#2)___________payment____________________________________________________________________________________________________________________________________________________________“Payyourselffirst.”Whenfamilyispaiddifferentlyitislicensetoactdifferentlyandfollowaseparatesetofrules.

#3)Lastnameentitlesa____________________position.____________________________________________________________________________________________________________________________________________________________Respectcomeswhenyouprovidetangiblevalueandresultsthattheentireteamcansee.Separateareasofcontrolandspecificjobdescriptionsarekey.“Eachfamilymemberhasclearlydefinedjobdescriptionsandwetryhardtostayoutofeachothersareas.Thisavoidsconfusionforemployeesandkeepsthepeaceinthefamily.”“Youreallyhavetohaveawaynottosteponeachotherstoes.IfIseesomethingIdon’tlikeinmybrothersarea,Iwilltellhimaboutitbutlethimknowthatit’shisareaandI’llleaveituptohim.”#4)Special______________ortreatment.____________________________________________________________________________________________________________________________________________________________Theemployeehandbookappliestoeveryone.Whatisfamilycurrentlydoingthattheotherteammemberswouldnotgetawaywith?________________________________________________________________________________________________________

#5)Past______________________________________________________________________________________________________________________________________________________________________________Thebusinessisnotalivechessboardtoconductbattle.Donotputyourstafforcustomersthoughthiskindofdrama.GoldenNugget:Neversayanythingnegativeaboutafamilymember.Whatfoundationalrulesarewebreaking?Whatwouldhelp?________________________________________________________________________________________________________________________________________________________________________________________________________________IntroducingFamilyIntotheBusiness:Firstdetermine..• WillanyoftheFoundationalFivebeanissue?• Wouldthisjobexistifthisfamilymemberdidnotneedajob?

• Dotheyhavetheskills/talents/temperamenttoexcelatthisjob?

• Isthispositionrevenuegenerating?o Ifso,howmuchandhowwillyoutrackit?

IntroducingFamilyIntotheBusiness:Whatisneededtosetthemupforsuccess?______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Whatyoulearnisfarmoreimportantthanwhatyouearninthebeginning.“Isincerelybelievethatworkinginafamilybusinessisaprivilege…notabirthright.”Somelessonscanonlybelearnedintherealworld–outsideofthebubbleofthefamilybusiness.Didanyfamilymembersgetsetupforfailure?Howcanwesetitright?____________________________________________________________________________________________

ExitingFamilyOutoftheBusiness__________________________________________________________________________________________________________________________________________“Mywifedoesn’tworkhereanymoreandwegetalongfinenow!”Whatisyourexitplan/successionplan?__________________________________________________________________________________________________________________________________________“I’veworkedveryhardonoursuccessionplan.ThepersonalguaranteewithourbankswouldbehardforthemifIwerenothere.Itrytogetthekidslistedonouragreementswiththebankswheneverpossible.”Howaretheassetsheld?Willseniorfamilybeabletoleavethebusinesswithouttyingupassetstosecurecreditlines?Doyouhaveanemergencyplannow?__________________________________________________________________________________________________________________________________________

WarningSignstoTakeSeriously:• Losingtopperformingnon-familystaff• Fighting• Familywhodoesn’tworkforthebusinessinsertingtheiropinions(YouarenotpayingJr.enough,heshouldgetweekendsoff,etc..)

__________________________________________________________________________________________________________________________________________“Wepayacertifiedfamilytherapisttomoderateallofourbusinessmeetings.Itisthebestmoneywe’veeverspent.”Separateworklifefromhomelife:__________________________________________________________________________________________________________________________________________Somewaysto‘fliptheswitch’fromworktohome:• Limitthetimeafterworkspentdiscussingwork• Taketruedaysoff–turnoffyourphone• Writedownyourideastodiscusslater• Planfamilyactivitiesandputthemontheschedule

“Momalwayssaid,‘Noworktalkatthetable!’”

RunwithFamilyRun–Capitalizeonit!Howcanyouusebeingfamilyrunasacompetitiveadvantage?__________________________________________________________________________________________________________________________________________“Peoplelikedoingbusinesswithfamilyrunoperationsaslongattheyareprofessional,fairandhard-working.Shakehandsandintroduceyourself,workthegrillatevents,pickuptrash-nojobistoobigortoosmall.”“Makeeveryonefeelpartofyourfamily.”FinalThoughts__________________________________________________________________________________________________________________________________________“Afamily-rundealershipisreallyademocracy.Therearetimesyou’dliketosay‘thisishowwearegoingtodoit’butit’snotadictatorship.”

DoFamilyFeelingsFactorintoFinancials?FamilyRunDealershipsByValerieZiebronPresidentofVRZConsulting

Owningafamily-runbusinesshasalwaysbeenapartoftheAmericandreamandmanyRVdealershipsarefamilyruninsomecapacity,somemoreprofitableandmorepeacefulthanothers.HerearefivekeysthatseparatetheAmericandreamsfromthefamilyfeuds.Danger#1:OverpaymentPaydeterminedbylineageinsteadofwhatthejobcommands.Askyourself‘Ifwehiredanon-familymembertodothisjob,whatwoulditpay?’Thatiswhatitshouldpay.Period.Deviatefromthisandyouareputtingfeelingsabovefinancials.Rememberyouagreedtorunabusinesstogether.Moneydoesnotmeanlove.Moneyisameasurementfortheworkprovided.Sometimesitismoreimportanttodoajobforwhatyouwilllearninsteadofwhatyouwillearn.Itwillpayofflong-term.Danger#2:Underpayment“Wedon’treallypayhimwhatthejobdeservesbecausehe’sbuildingequityintothebusinessthatwillonedaybehis”.Thetroublethathasstemmedfromthiscouldfillabook.Iffamilyis‘paid’differently,itislicenseto‘act’differentlyandthisleadstotrouble.Mostgoodfinancialbooksonthemarketadviseto“payyourselffirst”formanygoodreasons.Theskillsusedtomanagepersonalfinancewillbeverysimilartotheskillsusedtomanagethebusinessfinance.Givefamilymemberswhatthejobpays–evenatayoungagesotheycandeveloptheskillsofgoodmoneymanagement.Ifyoustillarenotsoldonthis,askyourtaxprofessionalorCPAfortheirtopreasonsastowhythisisimportant.Danger#3:‘MylastnamesonthebuildingsoI’mentitledtoamanagementposition’Peoplearebornwithnaturaltalentsthatcanbedevelopedwithrelativeeaseandotherthingsthattheywillalwaysstrugglewith.Itiswisetodiscoverthesenaturaltalentsandfindapositionwithinthedealershipthatcannurtureandcultivatethesetalentsintostrongskillsetstohelpthedealershipexcel.Ifasonordaughteroftheownerisreallygreatattheirjob,theywillearntherespectofthestaff–evenifthetitletheyholdisnot‘manager’.Infact,itisofteneasierto

gainrespectifthejobproducesmaretangibleresultsforalltosee–liketechnician,orsalesperson,ordetailorpartscounter.Excelinthesepositionsandyouwillfindpeoplearewillingtofollowyourdirection.Onlythenareyoureadyformanagement.Itishardtobealeaderifnoonewillinglyfollows.Danger#4:SpecialRules

Rulesareputinplacetoensurethatworkgetsdoneasefficientlyaspossiblefortheprofitabilityofthebusiness.

Weexpectourstafftolimittheuseofcellphonesandpersonalcallstoemergencies.Weexpectthemtogettoworkontimeandstaythereallday,toparkintheproperplaces,notusetheshopforpersonaluse,andnottaketheinventoryorgiveitaway.If‘family’isallowedtoplaybyadifferentsetofrules,notonlydoesithurtourprofitabilityanddemoralizetheteambutitalsoopensusuptoH.R.lawsuitsbecauseofalackofconsistency.Ifyouwanttheteamtofollowtherules,leadbyexample!Danger#5:HistoryBringingpastrelationshipissuesintotheworkplacecancreatealotofunnecessaryprofit-killingdrama.

Iftherewasagreatdealofsiblingrivalryorrebellionorfightinginthehome,don’tbesurprisedifitshowsupinthebusiness.

Somefamiliesnicelyoutgrowtheseissuesandfindgreatjoyinworkingtogetherasadultstohelpgrowthefamilynestegg.Thatissooutstandingandsorare!Congratulateyourselveswithabigfamilyhug!Fortherestofyou,itiscriticaltoburythehatchet.Gosomeplaceoutsideofthedealershipandtalkitout.Donotmentionworkatallbutcleartheairofallfamilyissuesoutsideofwork.Somefamilieshavefounditmoreproductivetohaveathirdpartyinvolvedtofacilitatethis.Dowhatyouneedtodoandwrite-offanyexpenseincurred.Itwillbesomeofthebestmoneyinvestedinyourdealership.

Icanhearsomeofyourightnowsoundinglikeabadlymaintained,backfiringvintageVWCampervan:“but,but,but….”

Youcancomeupwithmanyexcusesastowhyyoushouldbeallowedtobuckthesefiveguidelines.Knockyourselfout!Thatisthebeautyofowningyourownbusiness.Justremember:youcanberightoryoucanberich,youcanberightoryoucanbehappy.

I’llputmymoneyonthefamilyrundealershipsthatarerichandhappyfollowingthesefiveguidelinestohelpthemprofitablypassthebusinessontothenextgeneration.